Editorial: Sensible approach to flood insurance

On Thursday, the U.S. Senate voted 67-32 on a common-sense plan to delay massive flood insurance rate hikes until the full financial fallout from those hikes can be estimated.

While that might sound like a good, solid way of implementing government change, it is far from a sure thing. Just getting a debate on the plan was a months-long process that involved a bipartisan coalition of senators from across the country.

The National Flood Insurance Program — the only way people can purchase flood insurance — faces some changes that could turn catastrophic for people in low-lying areas around the U.S.

Because of reforms required by a new federal law passed in 2012, the flood insurance program is facing huge price hikes. Those hikes could make flood insurance unaffordable for wide segments of our population. Secondarily, the hikes could make real estate transactions much more difficult and expensive, threatening to throw real estate markets across the United States into chaos.

Ironically, the reforms, which are supposed to make the flood insurance program financially stable, are likely to simply make it off limits to many of the people who currently use it.

There are other ways to pursue long-term stability.

Some estimates say huge numbers of people required by their mortgage companies to carry flood insurance fail to do so. Adding those home and business owners into the pool of people paying for insurance will put more money into the system.

Decreasing the 30 percent fee the government pays insurance companies for signing up flood insurance policy holders would also help the insurance program’s bottom line.

Simply making flood insurance unaffordable is not a long-term solution to a problem that confronts so many Americans. In fact, it could have the horrible effect of leaving even more American citizens reliant on the federal government if there is another natural disaster — the exact outcome the flood insurance program is designed to avoid.

While there is now some momentum behind the bipartisan effort, there is also some powerful opposition. The White House revealed it was not on board with the legislation as late as Wednesday, and House Speaker John Boehner indicated he opposed repealing the Biggert-Waters Flood Insurance Reform Act, but that the House might consider changes to help homeowners and taxpayers.

Folks in North Carolina should follow this issue closely and hope this sensible bill can take another step forward.

Portions of this editorial first appeared in the Thibodaux Daily Comet, a Halifax Media Group newspaper in Louisiana.